Canadian investors yesterday pressed BHP Billiton to increase its now hostile offer for PotashCorp, warning that the mining giant's $130-a-share bid for the fertiliser company would be insufficient.

Shares in PotashCorp climbed as high as $147 yesterday as investors bet on the Anglo-Australian group raising its bid. The board of PotashCorp rejected the $38.5bn (£24.7bn) offer on Monday, describing it as "grossly inadequate" and saying BHP would have to return with a "big boy price".

Daniel Bubis, chief investment officer of Tetrem Capital Management, a Winnipeg-based PotashCorp shareholder, said another bidder, possibly from China, might emerge and BHP could need to go as high as $170 a share.

Of Chinese investors, Mr Bubis added: "This is obviously, longer-term, an extremely important commodity for them. Their diets are changing and there's a lot of mouths to feed, and that's not going to change."

BHP's bid formally opens today, with the company arguing that the all-cash offer represents a 20 per cent premium to PotashCorp's closing price last week. The offer period is likely to stay open beyond the 19 October deadline as Canadian regulators consider the merits of the takeover.

A number of UK-based analysts said that BHP would eventually wrest control of PotashCorp, but that the offer was likely to go higher. "The issue for BHP is about how much they are prepared to pay," one analyst said.

"At the moment BHP does not have to ask shareholders for permission, because at $130 a share, the offer represents less than 25 per cent of the group's value. We reckon they could go to about $154 a share without going to shareholders. Beyond that backers may be less sanguine."

Only class one merger and acquisition deals, or those that represent 25 per cent of a company's overall value, require shareholder backing. BHP declined to comment on whether it was prepared to increase the offer.